Over the past ten years of my professional career, I have had the privilege of closely observing the evolution of the financial ecosystem in Latin America and how technology has changed the way large and medium-sized companies create innovative business models to benefit their clients.
Among the countries that have taken significant steps in the adoption of financial technologies, Colombia stands out as a true benchmark in the advancement of Open Finance. The country’s financial transformation has not only been rapid, but also comprehensive, incorporating various actors in the sector, understanding the synergy between the work of the public sector and the private sector, that is, fostering a collaborative environment that has enabled innovation and financial inclusion.
Here I outline some of the key reasons that explain Why Colombia is a model to follow in the region and a country that has known how to take advantage of the experiences of other Latin American countries that have already adopted this Open model.
(You can read: Credibanco and Sensedia launch interoperable hub in their commitment to open finance).
One of the main drivers behind Colombia’s leadership in Open Finance is its progressive regulatory framework, which, in my opinion, positions Colombia very strongly in the region. External Circular 004 of the Financial Superintendence established the general rules and standards for the secure treatment of personal data within the framework of open finance in the country. This regulation promotes competition, inclusion and efficiency in the provision of services, allowing entities to better profile users and develop strategies and alliances.
Open finance
That innovation that we talk so much about has technological standards, such as APIs, which according to the CFSnot only facilitate a clear legal framework and improve the financial consumer experience, but also ensure greater technical compatibility and represent a strategic asset to enhance operations in the context of open finance.
(You may be interested in: Segura Bank International to open a representative office in Colombia).
Today, the country has strong regulation that continues to evolve, supported by a robust financial infrastructure and a digitally active population.
In fact, Colombia is moving towards the implementation of a free and instant payment system in the medium termled by the Bank of the Republic. The private sector has also made significant technological advances. According to ACI Worldwide’s Prime Time for Real-Time 2024 report, Colombia stands out as the ninth global market in growth for real-time transfers, being the second in Latin America after Peru.
Open finance
On the other hand, the region has seen significant growth with 49 million transactions recorded in 2023, marking a year-on-year increase of 24%, driven especially by robust growth in Colombia, Argentina and Peru, according to the same report.
The success of Open Finance will depend, beyond the regulations, a change of mentality of both institutions and end consumers regarding data exchange.
(Read also: What is the Open Finance Institute and what advice does it offer?).
Companies must build trust and ensure security so that customers feel comfortable sharing their financial information.
In addition, they must add value and innovation to their products and services, allowing users to discover the benefits of sharing their information. Although the road is long, in Colombia there is will and progress by all actors to become a reference in the matter.
JOSE GOMEZ
Regional Manager of Sensedia for South America.
